Associated Banc-corp · NYSE:ASB
Associated Banc-corp — Investor Presentation (November 2016)
24 slides from Associated Banc-corp's investor presentation, Nov 15, 2016
Slide 1: Associated Banc-Corp Investor Presentation Fourth Quarter 2016
Associated Banc-Corp Investor Presentation FOURTH QUARTER 2016 Exhibit 99.1
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS Important note regarding forward-looking statements: Statements made in this presentation which are not purely historical are forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. This includes any statements regarding management’s
Slide 3: Associated Bank Franchise
Serving over 1 million customers in over 100 communities across 8 states1 217 branches Headquartered in Green Bay, Wisconsin ASSOCIATED BANK FRANCHISE 2 1 – Retail banking locations in Wisconsin, Illinois and Minnesota and commercial financial offices in Indiana, Michigan, Missouri, Ohio, and Texas
Slide 4: Attractive Midwest Markets
Midwest Commercial Real Estate Price Index is half as volatile4 as the Northeast regional index Midwest Home Price Index is half as volatile5 as the national average Eight of the top 10 cities by highest VantageScore6 are in the Upper Midwest ATTRACTIVE MIDWEST MARKETS 4.0% 4.1% 4.2% 4.5% 4.6% 4.8%
Slide 5: Evolving Delivery Model
4 EVOLVING DELIVERY MODEL LESS BRANCH CENTRIC; MORE MOBILE AND ENHANCED 24/7 ACCESS Mobile banking is accessed by nearly 30% of our consumer deposit customers Mobile deposits ~50% from third quarter 2015 Deposits ~50% from 2007 Branches ~30% from 2007 Completed extensive branch revitalization & mode
Slide 6: Loan Portfolio Trends
$1.8 $1.5 $1.5 $1.4 $1.4 $4.4 $4.5 $4.9 $5.7 $6.3 $3.4 $3.8 $4.0 $4.3 $4.9 $5.3 $5.9 $6.7 $7.1 $7.6 3Q 2012 3Q 2013 3Q 2014 3Q 2015 3Q 2016 Home equity & Other consumer Residential mortgage Commercial real estate Commercial & business $15.7 $14.9 $17.1 $18.5 $20.1 5 LOAN PORTFOLIO TRENDS $(94) $(80)
Slide 7: Deposit Portfolio Trends
Largest Deposit Markets Milwaukee $6.4 billion Chicago $4.2 billion Green Bay $2.0 billion Fastest Growing Markets (Deposit Growth %) Stevens Point +35% Beloit-Janesville +32% Chicago +19% Leadership Markets by Position Rank #1 #2 #3 Green Bay Wood County Shawano Appleton Stevens Point Sturgeon Bay
Slide 8: Diverse Business Lines
$9.3 $10.1 Community, Consumer, and Business Corporate and Commercial Specialty Average Loans $ billions Revenue $ millions Return on Average Allocated Capital 10.5% 10.9% Community, Consumer, and Business Corporate and Commercial Specialty $465 $278 Community, Consumer, and Business Corporate and C
Slide 9: Balanced Revenue Streams
Insurance commissions 24% Service charges on deposit accounts 19% Card-based and other nondeposit fees 14% Trust service fees 13% Mortgage banking, net 10% Capital market fees, net 6% Brokerage and annuity commissions 5% Other2 9% Corporate and Commercial Specialty 46% Community, Consumer, and Busin
Slide 10: Disciplined Credit Approach
28% 38% 18% 39% 9% 14% 15% 8% 8% 22% 1% Total Commercial Consumer WI IL MN Other Midwest Texas Other DISCIPLINED CREDIT APPROACH INTERNAL PORTFOLIO MANAGEMENT LEADS TO PURPOSEFUL DIVERSIFICATION 9 Asset Class Geography Industry / Property 30-40% 38% 30-40% 24% 30-40% 38% Target 3Q 2016 average Comme
Slide 11: Credit Quality Trends
CREDIT QUALITY TRENDS ($ IN MILLIONS) $180 $178 $251 $281 $270 $84 $124 $150 $176 $171 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 Oil and Gas $134 $158 $157 $154 $163 $13 $20 $129 $129 $127 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 Oil and Gas Potential Problem Loans Nonaccrual Loans Net Charge Offs (Rec
Slide 12: Expense Control
Enhanced Automation Operational Efficiencies Branch Consolidations Branch Staffing Initiatives EXPENSE CONTROL AUTOMATION AND INVESTMENTS ARE DRIVING BETTER EFFICIENCY OVER TIME Efficiency Drivers 1 – The fully tax-equivalent efficiency ratio is a non-GAAP financial measure, which is defined by the
Slide 13: Prudent Capital Management
$0.05 $0.08 $0.09 $0.10 $0.11 3Q 2012 3Q 2013 3Q 2014 3Q 2015 3Q 2016 Dividends per Common Share PRUDENT CAPITAL MANAGEMENT 12 172 165 157 150 150 3Q 2012 3Q 2013 3Q 2014 3Q 2015 3Q 2016 Average Common Shares Outstanding Diluted (in millions) 12.01% 11.64% 10.39% 9.39% 9.33% 3Q 2012 3Q 2013 3Q 2014
Slide 14: Delivering Long Term Value
Earnings Per Share 11% 5-Year CAGR Dividends 62% 5-Year CAGR Annualized Total Shareholder Return 19% 5-Year Return on average common equity Tier 1 9.7% YTD 2016 DELIVERING LONG TERM VALUE 13 6.7% 9.7% FY 2011 YTD 2016 $0.01 $0.11 3Q 2011 3Q 2016 $0.20 $0.34 3Q 2011 3Q 2016 11% 33% 136% One Year Thre
Slide 15: Appendix
APPENDIX
Slide 16: Third Quarter 2016 Recap
THIRD QUARTER 2016 RECAP Net income available to common equity of $52 million, or $0.34 per common share 15 Enhanced Customer Experience Implemented WiFi and instant EMV chip card issuance capabilities in all branches 33% increase in mobile customer sign-ons year over year Organic Balance Sheet Grow
Slide 17: Net Interest Income and Margin Trends
0.22% 0.22% 0.30% 0.31% 0.32% 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 Interest-bearing deposit costs Other funding costs $170 $169 $171 $176 $178 $1 $2 $1 $1 $1 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 Interest recoveries, prepayment fees, & deferred fees Net interest income net of interest recoverie
Slide 18: Noninterest Income Trends
$7 $8 $4 $4 $9 $9 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 Portfolio loan sales NONINTEREST INCOME TRENDS ($ IN MILLIONS) Mortgage Banking (net) Income $64 $63 $65 $67 $65 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 Sum of trust service fees, service charges on deposit accounts, card-based and other nond
Slide 19: Noninterest Expense Trends
$101 $100 $101 $102 $104 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 Personnel $21 $20 $20 $20 $19 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 NONINTEREST EXPENSE TRENDS ($ IN MILLIONS) Technology and Equipment 1 – FTE = Average full time equivalent employee Please refer to the Form 8-K filed October 20, 20
Slide 20: Loan Portfolio by State, Industry and Property Type
C&BL by State $7.6 billion CRE by State $4.8 billion Home Equity by State $1.0 billion C&BL by Industry $7.6 billion CRE by Property Type1 $4.8 billion Residential Mortgage by State $6.0 billion Wisconsin 33% Illinois 43% Minnesota 14% Other Midwest2 9% Other 1% Manufacturing 18% Finance & Insurance
Slide 21: Oil and Gas Portfolio by Geography
OIL AND GAS PORTFOLIO BY GEOGRAPHY SEPTEMBER 2016 PERIOD END ESTIMATED EXPOSURE 20 Permian 20% South TX & Eagle Ford 12% East TX North LA AR 15% Mid-Continent 17% Rockies 12% Permian 20% Mid-Continent (primarily OK & KS) 17% East Texas North Louisiana Arkansas 15% South Texas & Eagle Ford 12% Rockie
Slide 22: Oil and Gas Update
OIL AND GAS UPDATE Shared National Credit Review: 100% complete and results are fully reflected in 3Q 2016 New business: Since 4Q 2015, we have funded 12 new credits with $253 million of commitments and $148 million of outstandings, representing 21% of the 9/30/16 outstandings 21 $587 $522 $402
Slide 23: High Quality Securities
49% 33% 50% 67% 1% <1% Sep 2015 Sep 2016 HIGH QUALITY SECURITIES ($ IN BILLIONS) 22 $4.518 $4.962 $5.653 $6.017 $6.134 2.96% 2.59% 2.60% 2.48% 2.37% 1.00% 2.00% 3.00% 4.00% 5.00% $- $0.01 .$0 2 . .3$0 .4 .$0 5 . .6$0 .7 .$0 8 .9 $0. .1 0$ .1 1.$ 2 .1 .3$ .41 .$ 5 .1 6 .$ .71 $ .8 .1 9$ . 2 0 .$ .12
Slide 24: Reconciliation and Definitions of Non-GAAP Items
RECONCILIATION AND DEFINITIONS OF NON-GAAP ITEMS 23 Efficiency Ratio Reconciliation 2012 2013 2014 2015 YTD 2016 Federal Reserve efficiency ratio 72.62% 70.97% 70.26% 69.90% 67.51% Fully tax-equivalent adjustment (1.62) (1.46) (1.36) (1.42) (1.32) Other intangible amortization (0.44) (0.42) (0.38) (
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